It was a tale of two economies. America is experiencing a boom-bust cycle. But instead of happening sequentially, we’re basically booming and busting at the same time. In the NYT (Gift Article), Natasha Sarin, president of the Budget Lab at Yale, explains how we’re overcoming a lot of bad policy decisions and attacks on financial norms: “The economy is being bolstered by a remarkable investment boom in artificial intelligence. A credible estimate suggests that A.I. capital expenditures may reach 2 percent of the gross domestic product in 2025, up from most likely less than 0.1 percent in 2022. To provide some sense of scale, that means the equivalent of about $1,800 per person in America will be invested this year on A.I. The coat of A.I. gloss is giving the administration runway to double down on bad ideas: America’s effective overall tariff rate is nearly back to the levels announced in April, the vice president has called for the administration to be involved in the Federal Reserve’s interest rate decisions and Mr. Trump fired the head of the Bureau of Labor Statistics after a disappointing jobs report. The situation is worse than having all of your economic eggs in one basket. It’s closer to putting all of your eggs in one basket and stomping on all the other baskets.” (In the humanties department, we call this a total basket case.) There Are Two Economies: A.I. and Everything Else. Basically, it’s Big Tech vs Big Dreck. 2Humming AlongThe AI growth story is also a real estate story, and I’m not just talking about the mansions being built by founders and investors. We are experiencing major data center growth in many parts of the country. For a glimpse into what that might look like, photographer Stephen Voss takes us to Northern Virginia. WaPo(Gift Article): What it looks like in the world’s data center capital. “Here in the world’s internet hub, residents have long shouldered the costs of powering our insatiable digital demand. The structures are built between baseball fields, schools, homes and historic cemeteries.” And they all play the same tune: An ever-present hum. 3Change for the Twenties“For all the talk of red lines and points of no return, the modern United States has had democratic crises and authoritarian turmoil before. The language of break-glass, fire-alarm emergencies looks at our increasingly brittle existing modes of political organization and cannot see beyond them. But the way through will be to craft new modes of renewal adequate to the landscape of the world in which we find ourselves — forms analogous to the industrial union of the ’20s, and perhaps fueled by the generative civil society engine of the now vast nonprofit world. A century ago, in the forgotten history of a decade just barely out of living memory, we found pathways to a better place. The answer to how this all ends turns on experiments we have only barely begun to launch.” John Fabian Witt in the NYT gives us a history lesson (since for now, history is still legal): How to Save the American Experiment. 4Strike Breakers“The real catalyst for the ceasefire, meanwhile, seemed to have come about three weeks earlier. On September 9th, Israel launched a strike on a meeting of Hamas officials in Doha. The missiles missed their targets, but left Steve Witkoff, Trump’s Middle East envoy, ‘furious,’ the Times reported. Jared Kushner, Trump’s son-in-law, whose private-equity firm had received hundreds of millions of dollars in investment from Qatar, and who had been working with Blair on a postwar plan for Gaza, was similarly ‘angry and embarrassed.’ In the end, the strike had the opposite of its intended effect. It brought together leaders of Arab and Muslim countries to an emergency meeting in Doha, during which they worked on a list of demands to be included in a deal to end the war. Netanyahu, who had carried out a string of successful strikes in Lebanon, Syria, and Iran, appeared to have overplayed his hand this time.” Ruth Margalit on the events that led the Middle East toward a flicker of hope. The New Yorker: At the Edge of Peace. 5Extra, ExtraYou’re Not Welcome: “The state of Illinois and Chicago on Monday sued the Trump administration over its move to deploy National Guard troops to Chicago as the White House targets Democrat-led cities amid weeks of protests against the federal government’s immigration enforcement campaign. The lawsuit opens a new front in the legal battles the White House is waging against state and local officials, coming just hours after a federal judge blocked a similar deployment of the guard to Portland.” Illinois and Chicago sue Trump administration over deployment of National Guard. 6Bottom of the News“An internet outage that impacted parts of Texas last month was caused by a stray bullet that struck a key fiber optic line.”
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Monday, October 6, 2025
Chips and Dips
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